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Commercial real estate can be a source of regular revenue for the businesses that own such properties. Tenants that rent retail facilities, office space or industrial locations often commit to multi-year leases and either pay for maintenance or manage facility repairs on their own behalf. For years, office spaces were relatively lucrative commercial property holdings. Owners could readily replace tenants whose businesses failed or those who moved on to another space. In some cases, commercial landlords could charge a premium for offices in high-demand neighborhoods. Employers sometimes leveraged the location of their offices as a perk to prospective employees. That has shifted dramatically over the last few years. Remote work and hybrid work arrangements have become increasingly popular in many different sectors that used to demand in-person job performance. Companies have started limiting their use of office space or foregoing leases entirely. Those who own commercial space that they previously rented to other businesses may want to consider a facility conversion as a way to take a money pit and turn it into a new source of revenue. DEMAND FOR RESIDENTIAL PROPERTIES REMAINS HIGH While the need for rental office space has slumped in recent years, there is significant ongoing demand for rental residential space and also owner-occupied residential units. Prices in the residential sector have soared in the last few years. Investors and businesses that currently own office buildings can potentially seek changes to the zoning and make major adjustments to the facilities to convert them into buildings with multiple residential units. Depending on various factors, it may be more profitable to sell the individual units as condos or to lease them as apartments. Numerous challenges could potentially arise during the conversion process, including setbacks during the zoning process, difficulty with installing the necessary infrastructure for individual residential units and marketing to prospective tenants or owners. Such projects can take years to complete but can potentially turn a commercial building that does not generate revenue into a highly-profitable residential facility. Investors and business owners seeking to turn lemons into lemonade by converting unprofitable commercial properties into different types of new facilities often need assistance during that complex process. Bringing in the right support can take some of the frustration out of a commercial property conversion.

Property owners hire contractors with the expectation that they’ll take care of a project in a professional manner. Most projects are completed without any issues, but there are times when construction defects may plague the process and vision of interested parties. Determining what type of defect that’s present is often the first step in the process of getting it corrected. The following are the most common kinds of construction defects that may impact the integrity of any particular project. DESIGN DEFECTS Design defects happen if there are flaws in the engineering or architectural plans that govern a project. They may arise because of errors or omissions that occur during the design process. Structural issues and other serious problems can occur because of design defects. For example, lack of proper drainage because a building’s design doesn’t allow for it can lead to water damage over time. MATERIAL DEFECTS Material defects are the result of using substandard materials for a project. In some cases, this may be because of inappropriate material substitutions. These defects vary in severity based on how crucial the material is to the project. For example, poor quality concrete used as foundation is typically a more serious issue than poor quality trim being used around interior doors. WORKMANSHIP DEFECTS Workmanship defects occur when the quality of the work doesn’t meet the client’s agreed-upon expectations or the requirements for the project. This type of defect can encompass any aspect of a project, such as electrical work, plumbing, roofing or framing. Defects in this category may lead to safety hazards or place the structural integrity of a building in jeopardy. SUBSURFACE DEFECTS Subsurface defects relate to issues with the ground or soil beneath a structure. These defects can cause serious problems, such as foundation shifting or settling, leading to cracks and structural instability. Poor site preparation, such as inadequate compaction or failing to properly account for soil conditions, often contributes to these defects. When a construction defect occurs, many contractors will stand behind their projects and correct the problem. Yet it’s possible that a property owner will take legal action if their contractor doesn’t correct a defect. Legal assistance is beneficial in these cases because they can often be particularly complex and lengthy affairs.

Property owners hire contractors with the expectation that they’ll take care of a project in a professional manner. Most projects are completed without any issues, but there are times when construction defects may plague the process and vision of interested parties. Determining what type of defect that’s present is often the first step in the process of getting it corrected. The following are the most common kinds of construction defects that may impact the integrity of any particular project. DESIGN DEFECTS Design defects happen if there are flaws in the engineering or architectural plans that govern a project. They may arise because of errors or omissions that occur during the design process. Structural issues and other serious problems can occur because of design defects. For example, lack of proper drainage because a building’s design doesn’t allow for it can lead to water damage over time. MATERIAL DEFECTS Material defects are the result of using substandard materials for a project. In some cases, this may be because of inappropriate material substitutions. These defects vary in severity based on how crucial the material is to the project. For example, poor quality concrete used as foundation is typically a more serious issue than poor quality trim being used around interior doors. WORKMANSHIP DEFECTS Workmanship defects occur when the quality of the work doesn’t meet the client’s agreed-upon expectations or the requirements for the project. This type of defect can encompass any aspect of a project, such as electrical work, plumbing, roofing or framing. Defects in this category may lead to safety hazards or place the structural integrity of a building in jeopardy. SUBSURFACE DEFECTS Subsurface defects relate to issues with the ground or soil beneath a structure. These defects can cause serious problems, such as foundation shifting or settling, leading to cracks and structural instability. Poor site preparation, such as inadequate compaction or failing to properly account for soil conditions, often contributes to these defects. When a construction defect occurs, many contractors will stand behind their projects and correct the problem. Yet it’s possible that a property owner will take legal action if their contractor doesn’t correct a defect. Legal assistance is beneficial in these cases because they can often be particularly complex and lengthy affairs.

Business owners and executives often have to make difficult choices about harm reduction and risk mitigation. They need to address likely risks for the organization while simultaneously keeping costs to operate the company low. Professionals often have to balance the likely need for certain types of insurance coverage with the cost of a policy. One type of insurance that many professionals overlook is business interruption insurance coverage. While most companies never need business interruption insurance coverage, those that do may find it invaluable during times of economic hardship. HOW DOES BUSINESS INTERRUPTION INSURANCE WORK? Business interruption insurance is a type of coverage that helps pay operational expenses while a company cannot operate. Typically, the business has to face factors outside of the control of executives or ownership for such coverage to be available. A natural disaster might result in the long-term closure of nearby roads. That may force a retail establishment to close indefinitely. Business interruption insurance can help cover fixed operational expenses until the company either closes down for good or can finally reopen. WHAT DOES BUSINESS INTERRUPTION INSURANCE COVER? Technically, every business interruption policy is unique. Organizations typically outline the costs they want to cover in the policy, and the insurance company may impose either a set amount of coverage for those losses or a specific duration of time when the policy can pay those expenses. Business interruption insurance can cover mortgage payments or costs for rental space. The policy can pay for employee wages when a company has salaried employees. It can even cover the cost of their benefit packages. Reviewing policy documents to ensure proper coverage for likely expenses is an important part of securing business interruption insurance coverage. Given how expensive a business interruption policy claim can be for an insurance company, businesses often face a complex claims process. They likely need to have thorough documentation of the issue that caused the interruption and proof of the expenses that the policy should help cover. Those starting businesses, moving into a different position at an organization or reviewing current company protections may need support as they evaluate their current coverage for obvious gaps. Business interruption insurance can be very useful for some organizations and might potentially be a waste of capital for others. Exploring company exposure and different forms of insurance coverage can help owners and executives determine what forms of support they require for the protection of the organization, its investors and its employees. Reaching out to the team at Goodkin APC can help businesses evaluate their insurance options and current policies accordingly.

Business owners and executives often have to make difficult choices about harm reduction and risk mitigation. They need to address likely risks for the organization while simultaneously keeping costs to operate the company low. Professionals often have to balance the likely need for certain types of insurance coverage with the cost of a policy. One type of insurance that many professionals overlook is business interruption insurance coverage. While most companies never need business interruption insurance coverage, those that do may find it invaluable during times of economic hardship. HOW DOES BUSINESS INTERRUPTION INSURANCE WORK? Business interruption insurance is a type of coverage that helps pay operational expenses while a company cannot operate. Typically, the business has to face factors outside of the control of executives or ownership for such coverage to be available. A natural disaster might result in the long-term closure of nearby roads. That may force a retail establishment to close indefinitely. Business interruption insurance can help cover fixed operational expenses until the company either closes down for good or can finally reopen. WHAT DOES BUSINESS INTERRUPTION INSURANCE COVER? Technically, every business interruption policy is unique. Organizations typically outline the costs they want to cover in the policy, and the insurance company may impose either a set amount of coverage for those losses or a specific duration of time when the policy can pay those expenses. Business interruption insurance can cover mortgage payments or costs for rental space. The policy can pay for employee wages when a company has salaried employees. It can even cover the cost of their benefit packages. Reviewing policy documents to ensure proper coverage for likely expenses is an important part of securing business interruption insurance coverage. Given how expensive a business interruption policy claim can be for an insurance company, businesses often face a complex claims process. They likely need to have thorough documentation of the issue that caused the interruption and proof of the expenses that the policy should help cover. Those starting businesses, moving into a different position at an organization or reviewing current company protections may need support as they evaluate their current coverage for obvious gaps. Business interruption insurance can be very useful for some organizations and might potentially be a waste of capital for others. Exploring company exposure and different forms of insurance coverage can help owners and executives determine what forms of support they require for the protection of the organization, its investors and its employees. Reaching out to the team at Goodkin APC can help businesses evaluate their insurance options and current policies accordingly.

Starting a partnership requires each owner to protect themselves while they simultaneously focus on the broader interests of the company. One way to do this is to have a comprehensive operating agreement in place for the business, ideally before it becomes operational. One of the primary concerns that should be addressed in a partnership operating agreement is the definition of the partnership structure. This includes specifying the type of partnership, such as general, limited or limited liability partnership. DEFINING CONTRIBUTIONS AND OWNERSHIP Each partner’s contributions to the business, including intellectual property, physical assets and financial matters should be noted in the agreement. It should also clearly state the percentage of ownership in the company for each partner. ROLES AND RESPONSIBILITIES Each partner may have a part of the company that they’re responsible for. This should be written out in the operating agreement so that there’s not any doubt about who should handle what. Consider daily operations, overall management and decision-making processes. PROFITS AND LOSSES Profit and loss distribution is a critical part of an operating agreement. This should include the agreed-upon formula for splitting everything. It might be based on the initial contributions of each partner. The more detailed this information, the less of a chance there will be a dispute in the future. DECISION-MAKING PROCESSES The decision-making process should be outlined. This includes the voting rights of each partner and what’s required for making significant decisions. While it may not happen often, deadlocks should also be covered. This includes resolution methods for those situations. PROCEDURES FOR ADMITTING NEW PARTNERS There may be a time when new partners need to join the partnership. Having the selection criteria and procedures for this included in the agreement can make that easier. The method for adjusting profit and loss divisions and ownership percentages should also be included. EXIT STRATEGY AND DISSOLUTION The terms for a partner leaving the company or for dissolving the partnership should be written out. This can include retirement, resignation and other options like buyouts. A comprehensive operating agreement may have other elements. For example, dispute resolution methods might be a good addition so there’s a plan in place if partners don’t agree on business operations. Working with a legal representative who can assist with developing this document may be beneficial, given the complexities at issue and all that is at stake.

Starting a partnership requires each owner to protect themselves while they simultaneously focus on the broader interests of the company. One way to do this is to have a comprehensive operating agreement in place for the business, ideally before it becomes operational. One of the primary concerns that should be addressed in a partnership operating agreement is the definition of the partnership structure. This includes specifying the type of partnership, such as general, limited or limited liability partnership. DEFINING CONTRIBUTIONS AND OWNERSHIP Each partner’s contributions to the business, including intellectual property, physical assets and financial matters should be noted in the agreement. It should also clearly state the percentage of ownership in the company for each partner. ROLES AND RESPONSIBILITIES Each partner may have a part of the company that they’re responsible for. This should be written out in the operating agreement so that there’s not any doubt about who should handle what. Consider daily operations, overall management and decision-making processes. PROFITS AND LOSSES Profit and loss distribution is a critical part of an operating agreement. This should include the agreed-upon formula for splitting everything. It might be based on the initial contributions of each partner. The more detailed this information, the less of a chance there will be a dispute in the future. DECISION-MAKING PROCESSES The decision-making process should be outlined. This includes the voting rights of each partner and what’s required for making significant decisions. While it may not happen often, deadlocks should also be covered. This includes resolution methods for those situations. PROCEDURES FOR ADMITTING NEW PARTNERS There may be a time when new partners need to join the partnership. Having the selection criteria and procedures for this included in the agreement can make that easier. The method for adjusting profit and loss divisions and ownership percentages should also be included. EXIT STRATEGY AND DISSOLUTION The terms for a partner leaving the company or for dissolving the partnership should be written out. This can include retirement, resignation and other options like buyouts. A comprehensive operating agreement may have other elements. For example, dispute resolution methods might be a good addition so there’s a plan in place if partners don’t agree on business operations. Working with a legal representative who can assist with developing this document may be beneficial, given the complexities at issue and all that is at stake.

Facility maintenance can be one of the biggest financial obligations of any landlord. There may be substantially more maintenance requirements at commercial properties when compared with residential properties. Businesses may rely on large parking lots for customer access. They may also need customized, complex infrastructure, such as loading docks for commercial transportation of goods manufactured at the facility. Maintaining those facilities is crucial to a company’s safe and successful operations. In some cases, business tenants do some or even all of the facility maintenance themselves at rental properties. Other times, they can rely on a landlord to handle most major maintenance matters. Depending on the terms of a lease, there are several ways to address the maintenance costs and responsibilities at a commercial property. The following are the most common ways to address the need to maintain and repair any particular premises. ADDRESSING RESPONSIBILITY AND/OR COSTS Oftentimes, commercial landlords expect tenants to maintain the premises on their own. Facility maintenance and repairs can fall to the business using the space, not the landlord who owns the property. A triple net (NNN) lease is an example of a commercial lease where the tenant assumes responsibility and expenses for all relevant maintenance and building costs. However, requiring a tenant to cover those costs or handle maintenance matters might be unrealistic in many scenarios. Small retail establishments or insurance brokerages with three employees may not have the resources to handle facility maintenance. In such scenarios, landlords may pass those expenses on to tenants through common area maintenance (CAM) fees. As such, the landlord provides everything from parking lot maintenance and security to bathroom cleaning services, and the tenants all share a proportionate amount of those costs. Sometimes, a lease makes a tenant responsible for certain matters, while the landlord may charge for other maintenance services. In all but the rarest of cases, landlords typically either pass actual responsibility for maintenance to commercial tenants or hold them accountable for the cost of facility maintenance. Negotiating terms that work for both a landlord and tenants alike is critical to the success of commercial lease negotiations. Maintenance responsibility and expenses are often among the terms that those parties need to negotiate before signing a lease.

Facility maintenance can be one of the biggest financial obligations of any landlord. There may be substantially more maintenance requirements at commercial properties when compared with residential properties. Businesses may rely on large parking lots for customer access. They may also need customized, complex infrastructure, such as loading docks for commercial transportation of goods manufactured at the facility. Maintaining those facilities is crucial to a company’s safe and successful operations. In some cases, business tenants do some or even all of the facility maintenance themselves at rental properties. Other times, they can rely on a landlord to handle most major maintenance matters. Depending on the terms of a lease, there are several ways to address the maintenance costs and responsibilities at a commercial property. The following are the most common ways to address the need to maintain and repair any particular premises. ADDRESSING RESPONSIBILITY AND/OR COSTS Oftentimes, commercial landlords expect tenants to maintain the premises on their own. Facility maintenance and repairs can fall to the business using the space, not the landlord who owns the property. A triple net (NNN) lease is an example of a commercial lease where the tenant assumes responsibility and expenses for all relevant maintenance and building costs. However, requiring a tenant to cover those costs or handle maintenance matters might be unrealistic in many scenarios. Small retail establishments or insurance brokerages with three employees may not have the resources to handle facility maintenance. In such scenarios, landlords may pass those expenses on to tenants through common area maintenance (CAM) fees. As such, the landlord provides everything from parking lot maintenance and security to bathroom cleaning services, and the tenants all share a proportionate amount of those costs. Sometimes, a lease makes a tenant responsible for certain matters, while the landlord may charge for other maintenance services. In all but the rarest of cases, landlords typically either pass actual responsibility for maintenance to commercial tenants or hold them accountable for the cost of facility maintenance. Negotiating terms that work for both a landlord and tenants alike is critical to the success of commercial lease negotiations. Maintenance responsibility and expenses are often among the terms that those parties need to negotiate before signing a lease.

Adverse possession traces its roots back to ancient legal systems where a medieval farmer tills the soil, plants crops and builds a modest cottage on a piece of land. Over time, the farmer’s descendants continue to work the land, generation after generation. Eventually, the land becomes synonymous with their identity. It’s not just a plot; it’s their legacy. Fast-forward to modern times, and the concept remains relevant. A legal doctrine that allows a person to claim land ownership under certain conditions, adverse possession allows someone who occupies another’s land openly, notoriously, and continuously to eventually claim legal ownership. In California, as in many other jurisdictions, the rules for adverse possession require the claimant to meet specific criteria before they can gain legal title to the property. Most people acquire property by purchasing it or inheriting it. However, some people aren’t in a position to acquire property that way. They might instead decide to lay claim to a vacant piece of land or even a house that’s sitting unoccupied. If someone occupying or using a piece of real estate does so long enough without the owner fighting back, the owner could potentially lose the property to the person living there without their permission. Adverse possession is the legal process by which a squatter or non-owner assumes legal ownership of a piece of property that previously belonged to someone else. How does adverse possession work in California? FIVE REQUIREMENTS FOR ADVERSE POSSESSION In California, the trespasser must successfully meet five conditions for adverse possession: Continuous possession: The trespasser must stake their claim and occupy the land without interruption for at least five years. However, that time frame increases to 20 years if the owner has a medical disability. The trespasser must physically use the property, whether performing improvements, living on it or cultivating it. Actual, open, and notorious possession: Rather than secretly occupying the land, the trespasser must be conspicuous, visible, unmistakable or impossible to ignore. It should be overt enough for the true owner to justifiably be concerned that someone occupies their property. Exclusive possession: The possession must be exclusive, meaning the claimant cannot share possession with strangers. Hostile claim: This doesn’t mean aggression or violence; hostility simply means the trespasser occupies the land without the valid owner’s permission. Pay property taxes: Rather than squatting, the occupier pays property taxes on the land. THE CLAIM OF RIGHT The “claim of right” essentially eliminates the need for the adverse possessor to show any specific intent regarding the property’s ownership. Instead, it focuses on the nature of the possession itself, which must be adverse to the true owner’s interests. If the occupier treats the land as their own for five years, under the conditions required by law, they may be able to perfect their title to the land through adverse possession, effectively converting their claim of right into actual ownership. THE PERSON CLAIMING THE PROPERTY MUST LIVE THERE OPENLY FOR YEARS For a squatter or non-owner occupant to establish an adverse possession claim to a property, they will need to openly take possession of the property and start using it. Only after five years of occupation is a claim of adverse possession possible. In fact, the person occupying the land has to not only live there but also pay taxes on the property. Once that occupying individual has met the obligation to stay at the property and pay taxes on it for five years, they can potentially go to court to seek ownership of the property. However, if the owner of record has a medical disability, that time frame increases to a full twenty years. FIGHTING ADVERSE POSSESSION Property owners can protect themselves against adverse possession claims through frequent inspections and the timely eviction of any occupants there without permission. Learning more about real estate laws in California can help you protect your investment in your property.

Adverse possession traces its roots back to ancient legal systems where a medieval farmer tills the soil, plants crops and builds a modest cottage on a piece of land. Over time, the farmer’s descendants continue to work the land, generation after generation. Eventually, the land becomes synonymous with their identity. It’s not just a plot; it’s their legacy. Fast-forward to modern times, and the concept remains relevant. A legal doctrine that allows a person to claim land ownership under certain conditions, adverse possession allows someone who occupies another’s land openly, notoriously, and continuously to eventually claim legal ownership. In California, as in many other jurisdictions, the rules for adverse possession require the claimant to meet specific criteria before they can gain legal title to the property. Most people acquire property by purchasing it or inheriting it. However, some people aren’t in a position to acquire property that way. They might instead decide to lay claim to a vacant piece of land or even a house that’s sitting unoccupied. If someone occupying or using a piece of real estate does so long enough without the owner fighting back, the owner could potentially lose the property to the person living there without their permission. Adverse possession is the legal process by which a squatter or non-owner assumes legal ownership of a piece of property that previously belonged to someone else. How does adverse possession work in California? FIVE REQUIREMENTS FOR ADVERSE POSSESSION In California, the trespasser must successfully meet five conditions for adverse possession: Continuous possession: The trespasser must stake their claim and occupy the land without interruption for at least five years. However, that time frame increases to 20 years if the owner has a medical disability. The trespasser must physically use the property, whether performing improvements, living on it or cultivating it. Actual, open, and notorious possession: Rather than secretly occupying the land, the trespasser must be conspicuous, visible, unmistakable or impossible to ignore. It should be overt enough for the true owner to justifiably be concerned that someone occupies their property. Exclusive possession: The possession must be exclusive, meaning the claimant cannot share possession with strangers. Hostile claim: This doesn’t mean aggression or violence; hostility simply means the trespasser occupies the land without the valid owner’s permission. Pay property taxes: Rather than squatting, the occupier pays property taxes on the land. THE CLAIM OF RIGHT The “claim of right” essentially eliminates the need for the adverse possessor to show any specific intent regarding the property’s ownership. Instead, it focuses on the nature of the possession itself, which must be adverse to the true owner’s interests. If the occupier treats the land as their own for five years, under the conditions required by law, they may be able to perfect their title to the land through adverse possession, effectively converting their claim of right into actual ownership. THE PERSON CLAIMING THE PROPERTY MUST LIVE THERE OPENLY FOR YEARS For a squatter or non-owner occupant to establish an adverse possession claim to a property, they will need to openly take possession of the property and start using it. Only after five years of occupation is a claim of adverse possession possible. In fact, the person occupying the land has to not only live there but also pay taxes on the property. Once that occupying individual has met the obligation to stay at the property and pay taxes on it for five years, they can potentially go to court to seek ownership of the property. However, if the owner of record has a medical disability, that time frame increases to a full twenty years. FIGHTING ADVERSE POSSESSION Property owners can protect themselves against adverse possession claims through frequent inspections and the timely eviction of any occupants there without permission. Learning more about real estate laws in California can help you protect your investment in your property.

Commercial construction projects might involve remodeling an existing facility to meet the needs of new business tenants. They also include scenarios where a landowner hires a commercial construction firm to erect an edifice or expand an existing building on previously vacant land. A commercial construction project can represent a massive financial investment on the part of an organization, landlord or property owner. It can also be a major source of revenue for construction firms and the professionals that they hire. Typically, commercial construction projects begin with the negotiation of a very thorough contract. The process unfolds in stages, and the client often does not pay the full value of the invoice for the work until the construction firm completes the project. The vast majority of commercial construction agreements move forward with minimal conflict. However, some cause major legal disputes. The following are some of the most common reasons that commercial construction leads to conflict. SIGNIFICANT CONSTRUCTION DELAYS Particularly when a business or entrepreneur needs commercial facilities to operate a business, delays in project completion can be a major setback. Construction delays could be the result of poor planning, unexpected project complications or disruptions in the supply chain. Regardless of what causes the delayed completion of the project, construction companies may face pushback from frustrated clients who cannot operate their businesses profitably until the completion of the project. UNPROFESSIONAL WORK Commercial construction projects do not always feature the same prestige finishing touches as high-end residential projects. Still, many companies seeking to erect or improve commercial facilities have specific standards they expect the construction company to meet. Whether the customer-facing spaces look sloppy and dark or there are issues with crucial systems, like the electrical wiring, work that does not conform to current professional standards could lead to significant disputes. DEVIATION FROM CONTRACT REQUIREMENTS Regardless of what current practices are in the construction sector, construction professionals and businesses need to prioritize the wishes of clients. Clients might request specific materials or may provide guidelines for the aesthetic or practical standards by which they intend to evaluate the finished project. It is necessary for construction firms to fulfill contractual obligations. Any significant changes to the project or deviations from the contract likely require communication between the construction firm and the client and then written approval of the changes to prevent litigation. The parties embroiled in a construction dispute may sometimes need to go to court to resolve their conflicts. Reviewing contract terms can be a good starting point for those concerned about a disagreement related to a commercial construction project that may be headed for court.